WINDHOEK - Turbulent times and economic hardships are at the forefront of discussions in both the private and public sectors. It is indeed a fact that the economic welfare of many Namibian households worsens as debt increases resulting in less buying power and a weaker savings rate. Namibians’ household debt is reported to be well over N$54 billion. Household debt is the combined debt of all people in a household and includes consumer debt and mortgage loans.
NedLoans recently introduced a product enhancement for government employees, by increasing the maximum loan to N$200,000 per client, subject to affordability.
Nedbank’s Head of NedLoans, Erastus Haihambo, says: “The primary purpose of the product enhancement is to respond in a meaningful way to the national crisis of multiple indebtedness attributed to a lack of financial wellness skills.”
As a significant rise in the level of household debt coincides historically with many severe economic crises, the bank aims to assist civil servants to better manage their debt through debt consolidation.
“Although a better deal is achieved when multiple debts are settled so that the client remains with one installment, it is equally important that we awaken people to the potential risks and consequences irresponsible borrowing may hold,” says Haihambo.
“This is exactly what we assist our clients with at NedLoans and why the enhancement to the current product was developed. When times are tough, clients start seeking out ‘easy’ loan options as they need immediate relief of credit card debt and other wilful consumption,” Haihambo continues.
In addition, NedLoans decided to become actively involved in delivering a village home solution to government employees living in unproclaimed areas who currently are not benefitting from the government housing scheme.
Consumer activist Rob Parker says this could be a good product for civil servants in far-flung rural areas as it’s reaching out “to a segment of the population who were previously without access to credit”.
“These products could also help consumers build creditworthiness.”
He, however, urges clients to check the terms and conditions and make sure they understand them before signing the agreement.
Publisher of Consumer News Namibia magazine, Willem Gariseb, says Nedbank’s offer is a step in the right direction.
“It’s about time the private sector showed some initiative. Decentralisation of vital services to the majority of Namibians can only be effective if the civil service can attract professionals to rural areas.
“This product could help those professionals to build proper houses in unproclaimed areas,” says Gariseb.
Haihambo says there are also civil servants who could not qualify for urban housing schemes and who, upon retirement, will have no choice but to return to their respective communal areas. “This is yet another reason why financial planning is so important.”
Parker says the loan could also be helpful to consolidate debt at a time when Namibians should look at managing their debt better and cut down where possible.
To apply, permanently employed civil servants with at least three months of service need to contact the nearest NedLoans/Nedbank branch and ask for a NedLoans officer or NedLoans sales.
Alternatively, government employees can SMS “Help” to 88188 and will be able to establish their qualified amount before going to a NedLoan/Nedbank branch for the application and an array of other services.
“We take our responsibility of ensuring that the benefits of economic growth trickle down to the everyday Namibian and improve the livelihood of households, and with this product - specifically those who depend on debt,” Haihambo concludes.